Fairfax didn't want to dance with a devil

By Ruth Williams

"I HOPE that my arrival will dispel the notion that I have cloven feet and pointy ears."

So uttered Conrad Black in 1991, soon after he touched down in Australia to make his case for ownership of the Fairfax group and, with it, this journal.

When it came to the feet and ears, many people refused to believe their eyes. Especially later, when he was asked to name a bad thing and a good thing about Australia's media.

Bad: "There is a degree of narcissism in the Australian press corps," said the future Baron Black of Crossharbour.

Good: "You have rather attractive women in the field, and that is nice."

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Sadly for Lord Black, there are no attractive women where he's going. No women, actually.

As the world takes stock of Conrad Black's stunning tumble from his self-erected pedestal, memories of Australia's, and Melbourne's, own misadventures with the disgraced tycoon have been rekindled.

It is almost exactly 16 years since he clinched control of

The Age and its stablemates, 11 years since he dropped his stake and came no more.

His appearances here were spectacular, and his short stint with Fairfax explosive.

Black first came to Australia in 1991 to mount his case for Fairfax, spouting historical analogies and classical allusions all the way. He was picked up at Sydney Airport in Kerry Packer's white Rolls Royce.

No one in Australian business had seen anything quite like him.

On the three or four occasions he visited Melbourne he dined at Mietta's and hobnobbed up and down Collins Street. He liked to wear a (then) stylish pale blue suit, which was ruined one day after an encounter with old-fashioned green copy paper  the kind that was loaded with ink.

He'd been sniffing around Australia's media for a few years. In 1988 his overtures to Warwick Fairfax about buying The Age were prematurely crushed when Bob Hawke ruled out foreign ownership of "an institution that has become part of the Victorian scene and beyond Victoria". This enraged Black and led to trouble for Hawke some years later.

Black returned to the fray in 1991, after the Fairfax group had toppled into receivership and was up for sale. At that point, many people in Australia still had not heard of him. "They became aware of him quite quickly," says Macquarie Bank's Melbourne executive chairman, Simon McKeon. "Especially after he started giving interviews."

The subsequent auction was a star-studded and bitchy affair. Chris Corrigan headed one bid team, and Irish press baron Tony O'Reilly was backing a second. A third, Australian Independent Newspapers, was led by former Qantas chairman Jim Leslie and was advised by McKeon, who was then a divisional director at Macquarie Bank.

Black's Tourang consortium included the late Kerry Packer, who was to own 14.99% of Fairfax, and Malcolm Turnbull, who represented the US junk bondholders Warwick Fairfax had turned to just before Fairfax fell over. Trevor Kennedy, then managing director of Packer's Consolidated Press Holdings, was to be managing director but was later dropped. As was Turnbull. The then merchant banker, who was described by Black as a "mercurial and abrasive" personality, was supposed to be a director of Fairfax if the Tourang consortium won. Turnbull was pushed out in circumstances that ended his and Packer's long association and friendship.

In in interview with The Age, Black noted that Packer was "undoubtedly heavy baggage". Politically, that is. He was right.

His presence on the Tourang consortium sparked a vocal campaign by Age staff and supporters against Packer owning any part of the company  a situation they feared would result in further media consolidation and more media control for Packer.

There were rallies and petitions, and Age staff signed a charter of editorial independence that still stands. Various notables rallied to the cause, even former prime ministers and bitter foes Gough Whitlam and Malcolm Fraser.

"Clearly, some of these journalists are terribly worked up on this issue," Black observed at the time.

Packer was forced to pull out. But even then, the government had major problems with the level of foreign ownership that the Tourang bid involved. The AIN bid, in contrast, emphasised its Australian roots. "It was a very interesting, engaging and time-consuming auction  it went on for a long time," says McKeon. "I think everyone was playing for keeps."

The Tourang structure was rejigged several times. In the end, Black's company Hollinger held 15%, San Francisco fund managers Hellman and Friedman a 5% non-voting stake, and 80% was destined for institutions and other shareholders in the float in May 1992.

When Black emerged victorious, he hand-picked for the Fairfax board Melbourne establishment figure Sir Rod Carnegie and former NSW chief justice Sir Laurence Street, and former governor-general Sir Zelman Cowen as chairman. Note the knighthoods. Black famously gave up his own Canadian citizenship to take a peerage.

Less than two years after winning Fairfax, Black gained approval from the Keating government to raise his stake to 25%. Funnily enough, Black's doing so in late 1993 coincided with the release of his autobiography, A Life in Progress.

This book, serialised in the Murdoch-owned Australian, told in great detail Black's most intimate dealings with Australia's political and business elite as he grappled for control of Fairfax.

In one chapter that inadvertently and spectacularly caused Keating considerable angst, Black claimed the PM  whom he described as a "delightful companion"  had criticised Fairfax journalists and promised to champion Black's case to raise his ownership of Fairfax to 25%.

Keating fumed as the Democrats and the Opposition pushed for a Senate committee inquiry into the decision. And Keating retaliated, claiming the then opposition leader, John Hewson, had told Black that a Coalition government would allow the press baron to own 100% of Fairfax.

Keating's claimed source for this information? Conrad Black, of course.

The inquiry was held and Black gave evidence. He claimed Bob Hawke had indicated in a meeting that foreign ownership of up to 35% would be acceptable. Hawke called Black a "man who simply cannot be believed". Black said Hawke was "frankly, pathetic".

One notable headline during the inquiry was "Black is an honest man, says wife".

Adding to the media hysteria of 1993 was a move by Packer, who defiantly swooped on 15% of Fairfax to the consternation of those who'd campaigned to keep him away. This led to accusations of collusion between Packer and Black and then speculation that Packer was mounting a full takeover bid.

Black spent another three years lobbying to raise his stake still further before finally giving up in late 1996. He wrote his own goodbye letter, which was published in The Age in the "dead news" week between Christmas and New Year. Black reflected on the "strikingly fit, tanned, nice-looking and stylish" people of Australia ("especially the women"), the "juvenilism" of its politicians and the insular nature of its political class before concluding, finally, that he left Australia "undefeated, with honour".

Black's impact in Australian business and politics went far beyond what his 25% stake in Fairfax, held for just five years, really warranted. But his imperious personality and grand habits meant it was always going to be that way.

It was surely for the best that he left when he did, leaving aside the probability that, as one former associate noted this week, "if he had got his way he would have looted Fairfax like he looted everything else he touched".

The Black/Fairfax relationship never really worked, even after Black signed the charter of independence. Black would snipe and publicly accuse Fairfax journalists of laziness and hysteria as the staffers attacked budget cuts and job losses.

And in just five years he had managed to make enemies of three former prime ministers, a former opposition leader, a host of former business associates and most of his staff. Plus, he never liked being here. "My main recollection with him was his disdain at spending so much time in the country," says McKeon. "He made it fairly clear he would prefer to be in other parts of the world."

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David Wilson, who locked horns with Black as head of The Age's independence committee, says Black saw Australia as a "distant colony". "I hope he has a wonderful break," Wilson added.